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COMPETITION,  NATUEAL  AND  INDUSTRIAL. 

IRA   WOODS    HOWEKTH. 
I* 

THE  fundamental  and  essential  principle  of  the  mod- 
ern industrial  order,  that  is,  of  Capitalism,  is  com- 
petition. Remove  competition  and  the  whole  system 
would  be  demolished,  or  at  least  transformed.  The 
competitive  system,  however,  has  the  sanction  and  the 
sanctity  of  'the  established  fact,'  and  of  a  long-con- 
tinued existence.  Hence  any  reform  which  would  en- 
danger it  by  disturbing  its  foundation  principle  is  at 
once,  and  almost  instinctively,  discredited  and  opposed. 
Do  the  trusts  suppress  competition!  Then,  they  must 
be  i smashed.'  Will  Socialism  destroy  competition! 
Down,  then,  with  Socialism.  This  represents  the  attitude 
of  perhaps  a  majority  of  the  people,  with  whom  competi- 
tion is  almost  a  sacred  principle  which  it  is  next  to  sac- 
rilege to  question  or  criticise. 

The  classical  economists  from  Adam  Smith  to  the  pres- 
ent time  have  taught  that  competition  is  indispensable 
to  progress.  They  have  assumed  perfect  mobility  of 
capital  and  labor,  and,  on  the  part  of  competitors,  a  com- 
plete knowledge  of  the  market.  With  this  wholly  theo- 
retical assumption  they  have  been  easily  able  to  show 
that  competition  exerts  a  necessary  regulative  action  in 
industry,  and  they  have  consequently  claimed  for  it  the 
sanction  of  a  natural  (or  divine)  law. 

It  is  unnecessary  to  quote  from  these  economists,  whose 
writings  are  familiar  or  easily  accessible,  but  I  must  be 
permitted  to  introduce  here,  as  representative,  a  passage 
from  a  recent  book  by  a  distinguished  French  economist. 
Speaking  of  industry,  and  after 'discussing  the  effects  of 
competition  on  production  and  value,  he  says:  "The 
socialistic  cry  for  regulation,  whether  by  the  State  or 


26^411 


A\ 


V^V 


any  other  artificial  authority,  is  therefore  entirely  absurd. 
Begulation  is  essential,  but  the  two  natural  laws  of  Pro- 
duction and  Value  have  long  since  joined  to  secure  it. 
We  need  only  refrain  from  throwing  obstacles  in  the  way 
of  their  regulative  operation ;  or,  if  an  artificial  obstruc- 
tion opposes  that  action,  to  guarantee  their  freedom  in 
removing  the  obstruction,  according  to  their  own  meth- 
ods. Their  action  must  be  secured,  but  it  is  to  be  secured 
only  by  refraining  from  all  interference."  x  What  so- 
ciety needs,  then,  according  to  this  conception,  is  absolute 
industrial  liberty.  ,;Give  everybody  a  fair  field  and  no 
favor,  and  competition  will  usher  in  the  industrial  mil- 
lennium ! ;'  +     - 

But  in  spite  of  the  confident  declarations  of  politicians 
and  the  teachings  of  the  classical  school  of  economists, 
there  are  two  classes  of  persons  with  whom  competition 
has  lost  some,  or  all,  of  its  sanctity.  These  are  the  large 
capitalists  on  the  one  hand  and  the  socialists  on  the  other. 
Mr.  Carnegie  and  Mr.  Gary  have  declared,  before  a  Con- 
gressional investigating  committee,  that  in  the  steel  in- 
dustry competition  is  dead.  Mr.  James  J.  Hill,  who,  we 
may  suppose,  would  not  brook  competition  in  the  railroad 
business  if  he  could  help  it,  expressed  the  opinion,  before 
the  same  committee,  that  "there  will  be  competition  just 
as  long  as  the  doctrine  of  the  survival  of  the  fittest  lasts.' ' 
It  would  perhaps  be  sufficiently  accurate  to  say  that  the 
magnates  of  industry  still  believe  in  competition  as  ap- 
plied to  consumers,  and  to  unorganized  laborers.  The 
latter  especially,  they  think,  need  the  spur  of  competi- 
tion. But  with  respect  to  large  units  of  capital,  the  waste 
and  instability  of  prices  occasioned  by  competition,  have 
become  so  obvious  to  those  who  control  such  units,  that, 
by  legal  combinations,  pools,  gentlemen's  agreements, 
and  the  like,  they  seek  to  avoid  it.  So  strong  is  the  ten- 
dency among  capitalists  to  combine  that  it  has  been  said 


1Molinari,    "The   Society   of   To-morrow, ' '    New    York,    1904,    p.    xlvii. 
Italics  mine. 


with  truth  that  "  where  combination  is  possible,  competi- 
tion is  impossible. ' ' 

With  the  socialist,  of  course,  competition  has  no  sanc- 
tity whatever.  He  even  fails  sometimes  to  recognize  its 
historic  value.  At  all  events  he  denies  its  rationality  as 
a  principle  of  industrial  organization,  and  strives  for  a 
cooperative  commonwealth. 

"With  these  two  exceptions  faith  in  the  beneficence  of 
competition  seems  to  be  general.  (^  We  are  told  that  it  is_ 
the  life  of  trade;  that  it  stimulates  production,  and 
effects  favorably  both  its  quantity  and  its  quality;  that 
it  is  the  test  of  efficiency ;  that  it  lowers  prices  and  tends 
to  regulate  them;  that  it  keeps  open  the  avenues  of 
opportunity  and  preserves  individual  initiative;  and, 
finally,  that  it  is  a  law  of  nature  with  which  it  is  folly 
to  try  to  interfere.)  A  speaker  at  a  recent  meeting  of 
the  Western  Economic  Society  declared  that,  "if  there  is 
one  thing  in  the  world  that  the  government  ought  not  to 
do  it  is  to  attempt  arbitrarily  to  interfere  with  the 
natural  laws  of  the  economic  and  business  world,  which 
are  of  divine  origin.  If  all  the  congresses  from  now  till 
doomsday  should  attempt  to  interfere  with  the  laws  of 
competition  on  the  one  hand  and  monopoly  on  the  other, 
they  would  fail  just  as  disastrously  as  if  they  should  at- 
tempt to  interfere  with  or  alter  the  law  of  gravitation. 
Trade  laws  are  just  as  immutable  as  natural  laws  in  the 
physical  world. ' '  3  Thus  the  basis  of  all  hope  of  the  con- 
scious construction  of  an  improved  industrial  order  is 
removed.  We  can  only  stand  by  and  await  the  operation 
of  the  natural  laws  of  trade.  Such  at  least  is  the  prac- 
tical and  sensible  policy  if  the  all  but  general  faith  in 
competition  is  well  founded,  that  is,  if  competition  is  a 
natural  law  from  the  operation  "of  which  flow  all  the 
beneficent  results  claimed  for  it. 

But  is  competition  a  natural  law  "as  immutable  as 
natural  laws  in  the  physical  world"'?    Those  who  contend 

2W.  T.  Denison,  assistant  attorney-general  of  the  United  States,  in  a 
talk  on  "The  Proper  Purpose  of  Regulatory  Legislation. ' ' 


that  it  is  base  their  contention  upon  the  universality  of 
the  struggle  for  existence  among  organic  beings.  By 
identifying  competition  with  the  struggle  for  existence 
its  advocates  derive  for  it  a  double  sanction.  This  strug- 
gle, we  are  told,  is  a  law  of  nature ;  competition  is  strug- 
gle; ergo,  competition  is  a  law  of  nature.  And,  again, 
the  struggle  for  existence  results  in  the  survival  of  the 
fittest;  competition  is  a  struggle  for  existence;  ergo, 
competition  results  in  the  survival  of  the  fittest.  Such 
reasoning  is  fallacious  unless  competition  and  the  strug- 
gle for  existence  are  the  same.  That  they  are  not  the 
same  becomes  obvious  if  we  consider  carefully  the  mean- 
ing of  the  phrase,  struggle  for  existence. 

I  use  this  term,  said  Darwin,  in  a  large  and  metaphorical  sense,  includ- 
ing dependence  of  one  being  on  another,  and  including  (which  is  more 
important)  not  only  the  life  of  the  individual,  but  success  in  leaving 
progeny.  Two  canine  animals,  in  a  time  of  dearth,  may  be  truly  said 
to  struggle  with  each  other  which  shall  get  food  and  live.  But  a  plant 
on  the  edge  of  a  desert  is  said  to  struggle  for  life  against  the  drought, 
though  more  properly  it  should  be  said  to  be  dependent  on  the  moisture. 
A  plant  which  annually  produces  a  thousand  seeds,  of  which  only  one  of 
an  average  comes  to  maturity,  may  be  more  truly  said  to  struggle  with 
the  plants  of  the  same  and  other  kinds  which  already  clothe  the  ground. 
The  mistletoe  is  dependent  on  the  apple  and  a  few  other  trees,  but  can 
only  in  a  far-fetched  sense  be  said  to  struggle  with  these  trees,  for,  if  too 
many  of  these  parasites  grow  on  the  same  tree,  it  languishes  and  dies. 
But  several  seedling  mistletoes,  growing  close  together  on  the  same  branch, 
may  more  truly  be  said  to  struggle  with  each  other.  As  the  mistletoe  is 
disseminated  by  birds,  its  existence  depends  on  them;  and  it  may  meta- 
phorically be  said  to  struggle  with  other  fruit-bearing  plants,  in  tempting 
the  birds  to  devour  and  thus  disseminate  its  seeds.  In  these  several  senses, 
which  pass  into  each  other,  I  use  for  convenience  sake  the  general  term 
of  'Struggle  for  Existence.'3 

From  this  explanation  of  its  use  it  should  be  clear  that 
the  term  struggle  for  existence  involves  what  is  correctly 
known  as  competition, — that  is,  the  struggle  of  individ- 
uals (or  groups)  with  individuals  (or  groups)  of  the  same 
species,  and  with  individuals  (or  groups)  of  a  distinct 
species, — and  also  the  struggle  of  individuals,  alone  or  in 
combination,  against  the  physical  conditions  of  life.     It 

3  t  <  Origin  of  Species, ' '  sixth  London  edition,  pp.  59,  60. 


is  obvious  that  this  second  form  of  struggle  has  nothing 
whatever  to  do  with  competition.  And  it  is  not  only  con- 
ceivable but  to  be  expected  that  among  beings  sufficiently 
intelligent  there  would  be  combination  and  perfect  co- 
operation to  achieve  success  economically  in  this  form  of 
struggle,  that  is,  in  the  struggle  against  nature.  At  all 
events,  competition,  that  is,  the  wasteful  strife  of  living 
beings  with  each  other,  might  be  conceived  as  entirely  elim- 
inated, and  the  struggle  for  existence  would  still  re- 
main. There  is  no  escape,  indeed,  from  struggle.  It  is 
required  by  the  very  constitution  of  things.  And  it  is 
beneficent,  for  it  is  practically  synonymous  with  activity, 
which  is  the  basis  of  all  development.  "Nature,"  says 
Goethe,  "knows  no  pause  in  progress,  and  attaches  her 
curse  to  all  inaction."  But  with  increasing  intelligence 
the  competitive  form  of  struggle  may  and  ought  to  be  sup- 
planted by  voluntary  cooperation,  for  only  by  cooper- 
ation may  the  struggle  against  nature,  against  unfavor- 
able physical  and  social  conditions,  be  most  effectively 
carried  on. 

Struggle,  then,  or  rather  activity,  is  the  law,  and  not^ 
competition.  He  who  engages  in  the  conquest  of  nature, 
of  disease,  of  ignorance,  of  vice  and  of  his  own  lower  self 
will  find  all  the  opportunity  for  struggle  necessary  to  his 
own  development  without  entering  into  the  competitive 
strife  of  man  against  man.  Competition  is  not  an  im- 
mutable law  of  nature. 

Eliminating  from  the  struggle  for  existence  the  strug- 
gle against  nature  there  remains  competition,  and  it  may 
be  freely  admitted  that,  as  the  struggle  is  carried  on 
among  the  lower  forms  of  life,  competition  is  the  most 
conspicuous  if  not  the  chief  element.  This  kind  of  strug- 
gle follows  necessarily  from  the  fact  that  these  forms  of 
life  are  endowed  with  marvelous  powers  of  propagation, 
and  exercise  no  self-restraint.  They  consequently  press* 
upon  the  food  supply  and  a  competitive  struggle  results. 
All  organic  beings  tend  to  increase  in  a  geometrical  ratio. 
If  none  was  destroyed,  the  progeny  of  a  single  pair,  even 


of  the  slowest  breeding,  would  soon  fill  the  earth.  Dar- 
win reckoned  that  from  a  single  pair  of  elephants,  which 
are  supposed  to  be  the  slowest  breeders  of  all  known  ani- 
mals, there  would  be  produced,  at  the  minimum  natural 
rate  of  increase,  nineteen  million  descendants  in  seven 
hundred  and  fifty  years.4  It  has  been  calculated  that, 
beginning  with  two  persons  and  supposing  a  doubling  of 
the  population  every  fifty  years,  "at  the  expiration  of 
three  thousand  years  the  whole  surface  of  the  earth,  land 
and  sea,  would  be  covered  with  people  piled  one  on  top 
of  the  other  eight  hundred  deep. ' ' 5  Professor  Huxley 
introduced  in  one  of  his  lectures  a  calculation  showing 
that  a  plant  which  produces  annually  fifty  seeds  could 
cover  every  square  foot  of  the  land  surface  of  the  earth 
in  less  than  nine  years.  Certain  low  forms  of  aquatic 
life  increase  with  such  amazing  rapidity  that,  if  none 
was  destroyed,  they  would  fill  the  ocean  in  a  week.  Thus 
all  forms  of  life,  high  and  low,  are  endowed  with  great 
powers  of  propagation.  Nature  pours  into  the  arena 
innumerable  combatants,  vastly  more  than  can  possibly 
survive,  and,  under  such  circumstances,  a  competitive 
struggle  for  food  and  reproduction  of  species  inevitably 
results.  Competition  may  therefore  be  said  to  be  a  biolog- 
ical law.  It  holds  true  among  beings  which  have  not 
sufficient  intelligence  to  appreciate  its  wastefulness,  to 
restrain  their  increase,  and  to  practice  a  higher  economy. 
The  competitive  form  of  the  struggle  for  existence  is, 
then,  inevitable  so  far  as  creatures  below  man  are  con- 
cerned. And  in  this  struggle,  it  is  true,  the  fittest  sur- 
vive. But  what  are  the  fittest!  As  has  often  been  pointed 
out,  they  are  not  always  the  highest  types,  but  merely 
those  best  adapted  to  the  circumstances  of  the  particular 
time  and  place.  It  may  so  happen,  and  does  often  hap- 
'  pen,  that  the  circumstances  are  such  as  to  favor  the  sur- 
vival of  a  lower  rather  than  a  higher  type.    The  parasite 


Op.  cit.,  pp.  60,  61. 

See  Ely,  "Introduction  to  Political  Economy,"  p.  163. 


may  drive  out  the  paragon.  In  Paraguay,  for  instance, 
as  we  are  told  by  Darwin,  "  neither  cattle  nor  horses  nor 
dogs  have  ever  run  wild,  though  they  swarm  southward 
and  northward  in  a  feral  state."  This  is  due  to  the 
prevalence  in  that  country  of  a  certain  kind  of  fly  which 
lays  its  eggs  in  the  navels  of  these  animals  when  first 
born,  which  results  in  their  destruction.  Thus  cattle, 
horses,  and  dogs  are  among  the  unfit  in  one  region  of 
South  America,  and  the  fittest  in  another.  Again,  in 
equatorial  Africa  the  tsetse  fly,  whose  bite  occasions  the 
sleeping  sickness,  has  depopulated  whole  regions  of  fertile 
country.  Beasts  and  reptiles,  however,  are  found  in  great 
abundance.  They  are  'the  fittest'  to  the  conditions  which 
there  prevail.  And  so  everywhere,  those  who  survive  in 
the  competitive  struggle  for  existence  do  not  prove 
thereby  that  they  are  superior  in  any  sense.  "If  our 
hemisphere  were  to  cool  again,"  says  Huxley,  "the  sur- 
vival of  the  fittest  might  bring  about,  in  the  vegetable 
kingdom,  a  population  of  more  and  more  stunted  and 
humbler  and  humbler  organisms,  until  the  'fittest'  that 
survived  might  be  nothing  but  lichens,  diatoms,  and  such 
microscopic  organisms  as  those  which  give  red  snow  its 
color;  while,  if  it  became  hotter,  the  pleasant  valley  of 
the  Thames  and  Isis  might  be  uninhabitable  by  any  ani- 
mated beings  save  those  that  flourish  in  a  tropical  jungle. 
They,  as  the  fittest,  the  best  adapted  to  the  changed  con- 
ditions, would  survive. " 6  In  the  course  of  social  evolu- 
tion, doubtless,  many  tribes  of  men  have  succumbed  to 
ferocious  animals  and  venomous  serpents.  Certainly 
states  possessing  a  'superior'  civilization  have  been  con- 
quered by  'inferior'  peoples.  In  such  cases  a  certain 
superiority  might  be  claimed  for  the  conquering  race, — 
in  numbers,  in  military  prowess,  in  hardihood,  or  the  like. 
But,  in  an  environment  fit  only  for  a  low  type  of  beasts'" ' 
or  of  men,  the  lower  will  drive  out  the  higher  unless  the 
higher  has  the  intelligence  to  transform  the  circumstances 

6  "Evolution  and  Ethics  and  Other  Essays,"  New  York,  1899,  pp.  80,  81. 


+ 


8 


into  fitness  for  its  own  survival.  Despite  the  currency  of 
the  proverb  it  is  demonstrably  untrue  that  always  "the 
race  is  to  the  swift  and  the  battle  to  the  strong." 

The  doctrine  of  the  survival  of  the  fittest,  then,  has 
no  bearing  upon  the  permanence  of  competition  in  indus- 
trial society  or  the  desirability  of  its  maintenance  as  a 
method  of  human  progress.  To  say  that  "we  shall  have 
competition  as  long  as  the  doctrine  of  the  survival  of  the 
fittest  lasts"  is  to  frame  a  remark  which  "sounds  better 
than  it  senses."  If  the  'fittest'  meant  the  'best,'  such  a 
statement  would  be  relevant,  but,  as  has  been  shown  here, 
and  as  has  been  pointed  out  many  times  by  others,  it 
does  not  mean  the  best;  hence  the  doctrine  of  the  sur- 
vival of  the  fittest  has  no  ethical  significance.  It  is  no 
obstacle  to  the  belief  in  the  gradual  substitution  of  co- 
operation for  competition.  Paraphrasing  the  language 
of  Huxley,  we  may  say  that  social  progress  means  a 
checking  of  competition  at  every  step  and  the  substitu- 
tion for  it  of  cooperation,  which  may  be  called  the  ethical 
process;  the  end  of  which  is  not  the  survival  of  those 
who  may  happen  to  be  the  fittest,  in  respect  of  the  whole 
of  the  natural  conditions  which  obtain,  but  of  those  who 
are  ethically  best.  "In  place  of  ruthless  self-assertion  it 
demands  self-restraint;  in  place  of  thrusting  aside,  or 
treading  down,  all  competitors,  it  requires  that  the  indi- 
vidual shall  not  merely  respect,  but  shall  help  his  fellows ; 
its  influence  is  directed,  not  so  much  to  the  survival  of 
the  fittest,  as  to  the  fitting  of  as  many  as  possible  to  sur- 
vive.   It  repudiates  the  gladiatorial  theory  of  existence." 

It  is  curious  that  men  will  justify  competition,  and 
assert  its  necessity,  on  the  ground  of  the  struggle  for 
existence  and  the  survival  of  the  fittest,  and  preach  non- 
interference with  nature,  when  they  are  continually  deny- 
ing their  theory  in  actual  practice.  Who  believes  in  the 
doctrine  of  non-interference  as  applied  to  the  plant  world? 
To  rely  there  upon  the  doctrine  of  the  survival  of  the  fit- 
test would  be  to  let  weeds  take  the  corn.  It  must  have 
been  an  early  advocate  of  the  virtues  of  competition  who 


expected  to  gather  grapes  from  thorns  and  figs  from 
thistles!  What  is  cultivation,  artificial  selection,  domes- 
tication, education,  legislation,  but  a  negation  of  the  gen- 
eral doctrine  that  nature  is  a  complex  of  fixed  laws  with 
which  it  is  folly  to  try  to  interfere?  A  natural  law  is 
nothing  but  a  descriptive  formula  expressing  a  tendency, 
and  what  tendency  in  the  organic  and  social  world  may 
not  be  to  some  extent  counteracted  by  intelligent  action! 
Man  does  not  rely  upon  the  doctrine  of  the  survival  of 
the  fittest  and  let  the  weeds  take  his  corn,  or  expect  to 
obtain  from  unrestrained  competitive  strife  the  highest 
type  of  horse  or  cow,  hog  or  sheep.  No  more  should  he 
hope  for  the  highest  type  of  man,  or  of  civilization,  to 
be  produced  through  competition. 

From  the  foregoing  it  should  be  clear  that,  so  far  as 
industrial  competition  is  concerned,  we  can  get  little 
comfort  out  of  the  doctrine  of  the  survival  of  the 
fittest,  unless  industrial  conditions_  are  wholly  satisfac- 
tory. The  richest  men,  the  economically  successful,  are 
not  necessarily  the  best  men.  As  things  now  are,  suc- 
cess too  often  depends  upon  hard-heartedness,  cruelty, 
ruthless  aggression,  animal  cunning,  unscrupulousness, 
and  other  intensely  egoistic  traits  which  are  foreign  to 
the  nature  of  the  highest  type  of  man. 

"But,  at  all  events,"  it  may  be  said,  "industrial  com- 
petition acts  upon  the  producer  by  stimulating  his  powers 
and  capacities  of  production.  Hence  the  survivors  of  such 
competition  are  at  least  the  most  effective  producers.' ' 
Not  even  so  much  can  be  admitted  without  qualification. 
It  is  true  that  effectiveness,  say  in  production,  is  an  ele- 
ment in  successful  competition,  and  sometimes  a  man 
succeeds  in  business,  that  is,  drives  out  his  competitors, 
solely  by  producing  superior  goods,  or  the  same  goods  at 
a  lower  cost.  But  that  is  by  no  means  the  rule.  Quality 
of  goods,  or  cheapness,  is  not  the  end  the  business  man  is 
aiming  at.  His  primary  object  is  profits,  and  profits  de- 
pend upon  price  of  goods  and  quantity  of  sale.  The 
stimulus  of  competition  operates,  therefore,  not  merely 


10 


upon  quantity  and  quality  of  goods  produced,  but  upon 
methods  of  sale.  Of  two  producers  of  equal  ability  the 
cheapest  seller  will  survive.  Now  the  arts  of  sale  con- 
sist largely  in  the  misrepresentation  of  wares  through 
expensive  advertising,  '  aggression, '  detraction  of  rivals, 
and  other  ' tricks  of  trade'  which  have  nothing  to  do  with 
improved  production.  Profits  are  reaped  through  adul- 
teration of  goods,  by  sly  substitution  of  shoddy  material, 
by  convincing  customers  that  you  'have  something  just 
as  good,'  when  you  have  not,  even  in  larger  proportion 
than  by  honest  striving  for  improved  quality  or  lower 
cost  of  production.  Say  what  you  will,  modesty,  sym- 
pathy with  the  unfortunate  and  the  weak,  altruism,  strict 
honesty,  are  not  the  qualities  at  premium  in  successful 
industrial  competition.  And  when  competition  is  suc- 
cessful, that  is,  when  a  rival  is  'put  out  of  business,'  so- 
ciety is  likely  to  lose.  For  if  the  defeated  rival  owes 
his  defeat  merely  to  a  more  scrupulous  conscience,  the 
standard  of  business  ethics  is  lowered;  and,  even  if  he 
be  a  less  efficient  producer,  his  services  are  lost  until  he 
readjusts  himself,  during  which  time  his  successful  com- 
petitor reaps  a  monopoly  advantage.  In  either  case  so- 
ciety would  be  better  off  through  intelligent  cooperation. 

Neither  the  best  men,  then,  nor  the  most  efficient  pro"-* 
ducers  are  the  certain  product  of  industrial  competition./ 
In  piratical  conditions  competition  produces  pirates; 
and,  under  certain  circumstances,  parasites  are  the  in- 
evitable result.  From  no  possible  point  of  view  may 
the  advocates  of  industrial  competition  derive  a  sanc- 
tion for  it,  or  assurance  of  its  perpetuity,  from  the  doc- 
trine of  the  survival  of  the  fittest. 

Descending,  then,  from  the  theory  of  the  general  benefi- 
cence of  industrial  competition,  may  it  not  be  claimed 
for  it  that  it  operates  to  the  advantage  of  one  class  of 
society  particularly,  namely,  the  consumers!  It  is  a 
popular  conception  encouraged  by  certain  economists, 
and  by  a  superficial  consideration  of  the  facts,  that  com- 
petition lowers  prices.     That  is  indeed  sometimes,  per- 


11 


haps  usually,  the  first  result.  But  competition  usually 
leads  to  combination,  and  when  combination  is  effected 
the  losses  which  the  competitors  sustained  during  their 
struggle  for  the  market  are  recouped,  and  thencefor- 
ward prices  may  be  maintained  at  a  higher  level  to  pro- 
vide profits  on  a  larger  mass  of  capital.  This  is  well  illus- 
trated in  the  effort  of  a  municipality  to  secure  a  cheaper 
service  from  public  utilities  by  encouraging  competition. 
A  city  has,  let  us  say,  a  gas  plant.  This  plant  is  capable 
of  supplying  all  the  service  required,  but  prices  are  too 
high.  A  franchise  is  granted  to  another  company,  an- 
other plant  is  built,  competition  results  and  prices  are 
lowered.  But  it  is  not  long  until  the  plants  are  united 
under  one  management,  or  there  is  an  agreement  as  to 
prices,  and  thenceforward  prices  must  be  sufficiently  high 
to  bring  the  usual  return  upon  twice  as  much  capital  as 
is  really  needed  to  supply  the  sendee. 

But  there  is  another  and  more  general  reason  why  com- 
petition does  not  permanently  lower  prices.  Industrial 
competition,  like  the  competition  which  takes  place  among 
the  lower  orders  of  life,  is  extremely  wasteful.  Consider 
the  vast  amount  of  advertising,  the  armies  ofsalesmen*,  the 
superfluous  middlemen,  the  high  rents  paid  for  favorable 
locations,  all  oi  which,  for  the  most  part,  merely  determine 
who  shall  sell  the  goods,  and  from  which  buyers  get  no 
benefit  whatever,  and  then  reflect  that  all  these  expenses 
must  be  added  to  the  cost  of  production  and  covered  by 
the  selling  price.  This  forces  prices  upward,  and  if  com- 
petition is  '  aggressive, '  and  that  is  the  kind  that  is  popu- 
larly approved,  they  will  be  pushed  to  the  point  beyond 
which  buyers  will  cease  to  purchase  in  large  quantities, 
and  that  is  all  that  monopoly  can  do.  The  tendency  of 
prices  under  aggressive  competition  is  to  the  same  point 
as  under  monopoly. 

The  plain  facts  of  industrial  life  disprove  the  prevail- 
ing belief  that  competition  lowers  prices.  Take,  for  in- 
stance, our  recent  experience  with  the  Standard  Oil  Trust. 
Relief  from  the  tyranny  of  this  oppressive  monopoly  was 


12 


to  be  obtained,  it  was  generally  thought,  only  by  its  dis- 
solution. Thus  was  competition  to  be  restored.  Well,  the 
Trust  was  dissolved,  and  with  what  result  f  An  increase  in 
the  capital  stocks  of  the  former  constituent  companies  ("to 
adjust  the  capital  so  as  to  make  it  commensurate  with  the 
value  of  the  assets,"  it  is  apologetically  explained),  and 
an  increase  in  the  prices  of  many  oil  products!  "Since 
the  dissolution  of  Standard  Oil,"  says  the  Chicago  Record- 
Herald  of  February  8,  1912,  "the  price  of  many  of  the 
products  has  been  advanced.  It  is  the  theory  that  the 
old  subsidiary  companies  dissociated  and  in  theoretical 
competition  are  entitled  to  make  larger  profits  than  when 
they  were  all  owned  by  the  old  holding  concern.' '  And 
so,  it  seems,  in  this  case  at  least,  even  'theoretical'  com- 
petition has  the  effect  of  raising  prices. 

We  have  now  seen  that  contrary  to  the  popular  im- 
pression industrial  competition  does  not  result  in  a  per- 
manent reduction  of  prices;  that  it  does  not  secure  the 
survival  of  the  most  efficient  producer;  that  in  no  case 
does  competition  necessarily  result  in  the  survival  of  the 
highest  type;  that  it  is  only  one  element  in  the  struggle 
for  existence;  and,  finally,  that  to  ground  sanction  of 
industrial  competition  on  the  doctrine  of  the  struggle  for 
existence  and  the  survival  of  the  fittest  is  to  evince  a 
gross  misconception  of  the  process  of  organic  evolution. 

But  competition  is  a  fact  of  nature  and  of  industrial  so- 
ciety. It  is  reasonable  to  suppose  that  it  could  not  have 
persisted  without  an  important  use.  What,  then,  is  the 
real  function  of  competition? 

As  already  pointed  out,  the  basis  of  all  development  is  -j 
activity.  Without  it  there  could  be  neither  life  nor  evolu- 
tion. Now,  it  is  obvious  that  among  brutes  and  among 
men,  competition,  if  conscious,  is  a  stimulus  to  action.  If 
it  should  suddenly  cease  as  a  natural  phenomenon  the 
activity  of  many  men,  and  most  animals,  would  be  greatly 
diminished,  and  progress,  of  course,  retarded.  Among 
the  lowest  animals  the  only  barriers  to  increase  are  de- 
feat and  destruction.    They  know  nothing  of  self-restraint. 


13 


A  want  impels  to  immediate  effort  to  gratify  it.  Inter- 
ference on  the  part  of  another  animal  naturally  results 
in  conflict.  Strife  is  the  normal  condition,  and  'the  lust 
of  battle'  an  advantage.  Here  competition  reigns  su- 
preme. It  is  inevitable;  and,  although  wasteful  in  the 
highest  degree,  it  supplies  a  powerful  stimulus  to  action. 
The  function  of  competition,  then,  is  to  secure  action  on 
the  part  of  unintelligent  creatures,  creatures  incapable 
of  appreciating  the  waste  of  energy  due  to  competitive 
strife  and  of  combining  and  cooperating  to  prevent  it. 
It  is  nature's  method  of  stimulating  action  until  mind  is 
sufficiently  developed  to  supplant  it  by  higher  motives. 

Competition,  then,  is  indeed  an  incentive  to  action. 
Does  that  not  prove  its  necessity  and  permanence  in  in- 
dustrial society?  Not  any  more  than  the  stimulating 
quality  of  anything  else  proves  its  necessity  and  per- 
manence. Fear  is  an  incentive,  but  we  are  trying  to 
drive  out  fear.  Goethe  ascribes  to  Satan  the  exact  virtue 
claimed  for  competition.  In  explaining  the  existence  of 
this  personage,  the  Lord,  in  the  prologue  to  Faust,  is 
made  to  say: 

All  too  prone  is  man  activity  to  shirk, 
In  unconditioned  rest  he  fain  would  live; 

Hence  this  companion  purposely  I  give, 
Who  stirs,  excites,  and  must  as  devil  work. 

But  as  modern  theology  has  practically  discarded  the 
devil,  so,  let  us  hope,  that  in  time  we  may  eliminate  com- 
petition as  a  necessary  means  of  social  progress.  Com-' 
petition  is  an  incentive  to  action,  but  so  is  a  bull-dog 
after  a  tramp.  There  are  other  incentives,  and  higher. 
The  mere  desire  to  beat  somebody  does  not  compare 
favorably,  from  an  ethical  standpoint,  with  interest  in 
the  welfare  of  wife  and  children,  the  joy  of  the  artist,  the 
scientist's  love  of  truth,  the  delight  of  the  mechanical 
inventor,  publicity  and  honor,  to  say  nothing  of  the  de- 
sire to  promote  the  public  good,  which  has  been  shown 
again  and  again  to  be  among  the  most  powerful  of  incen- 
tives. 


14 

The  necessity  of  competition,  then,  can  be  admitted 
only  with  respect  to  the  brute  creation  in  a  state  of 
nature,  and  to  such  men  as  do  not  respond  to  higher 
motives.  As  to  its  permanence,  it  is  significant  that  those 
who  argue  for  competition  as  a  necessary  incentive  usually 
affirm  it  with  respect  to  others,  not  to  themselves.  They 
at  least  have  risen  above  it!  If  any  man  of  action  has 
1  risen  above'  competition,  then,  of  course,  the  possibility 
may  be  asserted  of  all.  To  deny  it  is  to  disregard  past 
evolution  and  the  influence  of  education.  Competition/ 
will  gradually  disappear,  then,  as  higher  types  of  men\ 
are  developed.  But  society  will  not  wait  upon  individual 
development  for  the  removal  of  competition.  As  soon  as 
it  becomes  entirely  awake  to  its  excessive  wastefulness 
-and  brutality,  it  will  put  an  end  to  it,  even  at  the  risk 
of  weakening,  in  certain  cases,  individual  interest  and 
incentive.  If  society  were  as  intelligent  as  the  average 
individual,  it  would  not  tolerate  the  waste  and  anarchy 
of  industrial  competition  for  a  single  week. 

To  sum  up  this  division  of  our  discussion,  we  may  say 
tha^  competition,  in  the  natural  ordej^Jjs.ja-Jiecessary  in- 
centive  to  action.  Its  necessity  in  industrial  society 
diminishes,  nowever,  with  advancing  intelligence,  and 
ends  the  moment  individuals  are  sufficiently  responsive 
to  higher  motives  to  secure  the  activity  necessary  to 
progress.  For  the  appearance  and  strengthening  of  these 
higher  motives  we  may  safely  rely  upon  association,  as- 
sisted by  education  and  other  civilizing  influences.  It  is 
useless  to  deny,  as  some  do,  the  possibility  of  changing 
human  nature.  Man  has  emerged  from  the  brutes.  His 
present  nature  is  as  much  a  product  of  evolution  as  he  is 
himself.  Its  past  evolution  is  a  promise  of  continuing 
change.  Development,  here  as  elsewhere,  may  be  con- 
sciously effected  by  changing  the  environment.  The  argu- 
ment, if  it  is  to  be  so  dignified,  that  human  nature  is  not 
susceptible  to  change,  tells  against  the  '  regulation '  of 
competition,  as  well  as  against  its  elimination.  Such  an 
argument,  however,  is  really  not  worth  discussing.     In 


15 


social  polemics  the  dogma,  'You  cannot  change  human 
nature,'  is  the  last  refuge  of  a  defeated  opponent. 

It  is  usually  admitted  by  those  who  assert  the  neces- 
sity and  permanence  of  competition  that  it  should  be 
raised  to  higher  levels.  "  Competition, ' '  says  Professor 
Ely,  "is  a  permanent  feature  of  human  society.  It  be- 
gins with  the  lowest  orders  of  animals  and  continues  its, 
action  among  the  highest  orders  of  men.  But  it  con-! 
tinually  mounts  to  higher  and  higher  elevations,  and 
means  rivalry  for  ever  better  and  better  things.  We 
leave  behind  contests  for  bare  subsistence  to  engage  in 
contests  for  noble  prizes  of  the  mind  and  for  oppor- 
tunities for  social  service.  We  can,  then,  never  allow 
competition  to  cease.  * ' 7  The  context  shows  that  Pro- 
fessor Ely  means  industrial  competition  should  not  be 
allowed  to  cease.  His  conclusion  is  a  non  sequitur.  For, 
if  competition  "mounts  to  higher  and  higher  elevations, ' ' 
it  may  rise  above  the  industrial  plane  and  industry  be- 
come cooperative. 

To  me  it  seems  that  to  admit  that  competition  may  and 
should  be  raised  to  higher  and  higher  levels,  is  to  give 
up  the  case  for  our  competitive  system  of  industry.  For 
when  competition  is  raised  so  high  that  it  becomes  rivalry 
in  'social  service,'  it  is  no  longer  competition.  My  con- 
tention is  that  strife  of  man  against  man  is  not  es- 
sential to  progress,  and  that  because  it  always  involves 
wasteful  expenditure  of  energy,  the  elevation  of  com- 
petition by  eliminating  waste,  and  supplying  worthier 
objects,  must  inevitably  result  in  emulation  and  cooper- 
ation. 

Suppose,  for  instance,  an  individual  raised  to  the  moral 
level  at  which  he  responds  to  the  scriptural  injunction, 
"Let  nothing  be  done  through  strife  or  vain  glory;  but 
in  lowliness  of  mind  let  each  esteem  other  better  than 
themselves."  Such  a  man  would  naturally  emulate,  but 
not   compete.     Suppose,   again,   two   competitors  in  in- 

7 "  Evolution  of  Industrial  Society,"  New  York,  1902,  pp.  144,  145. 


16 


dustry.  Their  object  is  profits.  To  succeed  each  tries  to 
defeat  the  other.  The  thwarting  or  crippling  of  one  is 
an  advantage  to  his  opponent.  Now  suppose  the  object 
of  their  rivalry  transformed  from  profits  to  the  public 
good.  Then,  if,  for  any  cause,  one  is  rendered  less  ef- 
fective, the  other's  aim  is  to  that  extent  defeated.  Each 
desires  the  maximum  promotion  of  social  well-being. 
Neither  would  interfere  by  any  of  the  methods  known  to 
competition  to  diminish  the  efficiency  of  the  other.  For 
by  so  doing  he  would  deny  his  interest  in  the  public 
good,  or  defeat  his  own  purpose.  On  the  contrary,  each 
would  help  the  other.  That  is  to  say,  they  would  co- 
operate, not  compete. 

As  differences  of  opinion  here  seem  to  depend  largely 
on  definitions,  it  will  be  well  to  discriminate  as  carefully 
,  as  possible  between  competition  on  the  one  hand  and 
emulation  and  cooperation  on  the  other.  First  let  us 
endeavor  to  fix  the  meaning  of  competition.  In  the  ap- 
plication of  the  word  competition  to  the  plant  world,  it 
is  used  in  a  figurative  sense,  just  as  the  word  l struggle' 
is  used  in  the  same  application.  We  may  therefore  leave 
out  of  account  the  so-called  competition  of  plants,  and 
confine  our  attention  to  competition  in  the  animal  and 
social  world.  ,  In  this  realm  pom  petition  is  the  rivalry  o 
individuals  or  groups  for  a  satisfaction  which  only  one 
competitor  may  enjoy.  The  food  which  one  animal  se- 
cures is  forever  lost  to  another  who  was  striving  to  ob- 
tain it.  The  primary  definition  of  competition,  accord- 
ing to  the  Century  Dictionary,  is  "  the  act  of  seeking  or 
endeavoring  to  gain  what  another  is  endeavoring  to  gain 
at  the  same  time;  common  contest,  or  the  striving  for 
the  same  object."  Industrial  competition,  then,  must  be 
defined  as  the  effort  of  men  to  obtain  an  economic  ad- 
vantage which  all  in  pursuit  of  it  may  not  enjoy.  In  the 
case  of  competition  among  laborers  the  object  is  wages; 
with  employers  it  is  profits.  Inasmuch,  however,  as  in- 
dustry is  controlled  and  directed  by  the  employing  class, 
the  chief  end  of  industry  is  profits,  and  the  whole  indus- 


i 

3 


17 

trial  process  may  be  described  with  fairness  as  a  strug- 
gle for  profits. 

If  to  this  definition  of  industrial  competition  it  is  ob- 
jected that  it  brings  into  undue  prominence  its  selfish 
phase,  the  answer  is,  All  competition  is  essentially  selfish. 
That  is  its  condemnation.  Its  motto  is,  "Thou  shaft 
starve  ere  I  want."  No  matter  how  much  competition 
is  ' regulated'  by  forbidding  the  practice  of  objectionable 
methods,  the  selfishness  of  it  remains.  Professor  Ely 
asks:  "If  I  knock  you  down  with  a  sand  bag  and  rob 
you,  is  that  to  be  called  competition  ?  If  I  fit  out  an  armed 
ship  and  prey  upon  the  commerce  of  the  world,  is  that 
competition  ? ' ? 8  The  answer  is  they  are  inevitable  in- 
cidents of  'free'  competition.  Declare  such  practices 
criminal,  and  punish  those  who  resort  to  them  as  rob- 
bers and  pirates,  and  you  have  not  changed  the  essential 
nature  of  competition.  The  eternal  and  insuperable  ob-  j 
jection  to  competition  from  the  ethical  standpoint  is  the 
state  of  mind  involved,  just  as  waste  is  the  insuperable 
objection  from  the  economic  standpoint. 

Of  course,  it  is  not  to  be  denied  that  high  motives  and 
generous  action  are  often  operative  in  the  industrial 
world.  Business  men  are  sometimes  philanthropists. 
But  it  would  be  naive  to  assume  that  business  is  philan-  \ 
thropy,  and  define  industrial  competition  as  friendly  \ 
emulation.  We  must  regard  it  as  what  it  really  is, 
namely,  the  strife  of  men,  or  groups  of  men,  consciously 
or  unconsciously  carried  on,  with  the  purpose  of  economic 
gain;  success  being  dependent  upon  the  crippling  or  de- 
feat of  rivals.  Emulation,  benevolence,  sympathy,  love 
are  all  to  be  found  in  the  industrial  world,  but  they  exist 
in  spite  of  competition,  not  because  of  it.  Their  presence 
there  should  not  blind  us  to  the  essential  nature  of  in- 
dustrial competition. 

By  emulation  I  mean  the  struggle  to  approach,  equal 
or  surpass  another  in  merit,  or,  in  the  field  of  industry 


:\ 


*Op.  cit.,  p.  127. 


18 


in  productivity.  It  is  a  strong  motive  power  in  produc- 
tion, but  it  differs  essentially  from  competition,  since  its 
object  is  the  satisfaction  of  achievement,  and  not  the 
selfish  enjoyment  of  wealth.  It  involves  no  waste,  and 
is  therefore  consistent  with  a  maximum  production  at  a 
minimum  expenditure,  or  the  law  of  economy.  An  emu- 
lative industrial  order  would  be  vastly  superior  to  the 
present  competitive  system,  but  it  would  not  be  the  high- 
est, for  the  complete  moralization  of  emulation,  and  of 
competition,  would  inevitably  result  in  industrial  co- 
operation. 

To  transform  competition  and  emulation  into  indus- 
trial cooperation  it  is  only  necessary  to  raise  the  end  of 
action  from  ' better  and  better  things'  to  the  best,  namely, 
the  public  good.  Cooperation  means,  literally,  of  course, 
working  together.  To  work  together,  in  the  sense  implied, 
men  must  have  a  common  object.  It  may  be  noble  or 
ignoble.  But  always  to  work  together  is  more  effective 
than  to  work  against.  The  highest  end  of  action  is  the 
social  welfare.  The  highest  type  of  men  must  be  ani- 
mated by  the  desire  to  promote  it.  Hence,  if  intelligent, 
and  they  must  be  or  they  would  not  be  the  highest  type 
of  men,  they  must  cooperate.  For  the  highest  industrial 
efficiency  is  possible  only  when  there  is  common  effort  for 
the  common  good.  Cooperation  is  therefore  the  goal  of  ^ 
industrial  evolution. 

Deep  down  in  biological  evolution  originated  the  pa- 
rental and  the  gregarious  instincts,  the  i  struggle  for 
the  life  of  others,'  and  mutual  aid,  or  cooperation.  They 
softened  and  lessened  competition  within  groups  and 
proved  to  be  an  advantage  in  .group  competition  and 
group  survival.  Cooperation  in  its  origin,  then,  has 
exactly  the  same  natural  sanction  as  competition;  it 
originated  spontaneously  as  an  aid  to  survival.  But 
while  out  of  competition  sprang  the  self -regarding  vir- 
tues, the  other-regarding  virtues  owe  their  origin  to  co- 
operation. "Important  as  the  struggle  for  existence  has 
been  and  still  is,"  said  Darwin,  "yet  as  far  as  the  higher 


19 

part  of -man's  nature  is  concerned,  there  are  other  agencies 
more  important. ' ' 9  Chief  among  these  other  agencies  is 
cooperation.  Cooperation,  therefore,  is  the  more  sig- 
nificant fact  in  human  evolution.  It  exerts  by  far  the 
stronger  socializing  and  moralizing  influence.  If  progress 
continues,  it  seems  inevitable  that  competition  must  grow 
less  and  less  and  cooperation  more  and  more. 

It  might  seem  that  in  the  upward  march  of  living  things 
those  in  which  mind  first  appeared  would  at  once  see 
the  unnecessary  expenditure  of  energy  involved  in  com- 
petition, and  combine  to  prevent  it.  So  they  would 
if  mind,  at  its  appearance,  had  been  fully  formed.  But 
intelligence  began  in  the  simpler  feelings,  and  advanced 
only  by  slow  degrees.  What  we  should  expect  to  find  in 
history,  therefore,  is  a  gradual  displacement  of  competi- 
tion by  cooperation.  And  that  is  exactly  what  we  do 
find.  Every  step  in  civilization  has  meant  a  modification 
of  the  competitive  struggle.  Men  talk  of  'free*  indus- 
trial competition,  but  there  is  no  such  thing  to-day  on 
any  large  scale.  Combination  in  productive  enterprise 
and  trade  will  continue  because  of  their  economy,  and 
complete  economy  cannot  be  attained  without  thorough 
voluntary  cooperation. 

It  is  sometimes  said  that  even  with  socialized  industry 
competition  would  be  necessary  to  determine  individual 
efficiency.  The  most  that  can  be  admitted  is  that  social- 
ized industry  with  sl  competitive  test  of  efficiency  would 
be  a  great  advance  over  the  present  order.  But  to  say 
that  such  a  test  is  ideally  necessary  is  to  misconceive 
the  real  meaning  of  competition.  In  a  large  firm,  for 
instance,  each  employe  is  assigned  his  work  by  the  con- 
scious direction  and  control  of  the  manager.  If  the 
manager  be  wise,  he  does  not  set  his  men  to  compet- 
ing, to  trying  to  defeat  each  other,  or  to  get  one  an- 
other's jobs,  in  order  to  determine  fitness.  He  encourages 
emulation,  not  competition.    What  is  he  there  for  but  to 

""Descent  of  Man,"  2d  ed.,  p.  618. 


20 


/ 


determine  efficiency  by  achievement!  Conscious  selection 
does  not  necessarily  involve  or  imply  competition.  In 
the  selection  of  men  for  the  giant  corps  of  Frederick  the 
Great,  stature  was  the  primary  test.  Five-foot  men  could 
hardly  be  said  to  compete  for  a  place  with  men  of  six 
feet  four.  Men  were  chosen  merely  because  they  were 
tall.  Under  industrial  cooperation  what  a  man  could 
actually  do  would  be  the  rational  determinant  of  his  place 
and  duty. 

So  while  competition  might  long  remain  in  socialized 
industry,  it  is  not  a  necessary  factor.  Its  necessity  will 
decline  with  the  increase  of  intelligence  and  public  spirit. 
Full  and  voluntary  cooperation  is  the  ideal. 

To  appreciate  the  truth  that  the  ideal  state  must  be 
industrially  cooperative,  it  is  only  necessary  to  try  to 
conceive  what  a  state  would  be  like  in  which  competition 
was  'free,'  and  the  business  maxim,  l Every  man  for  him- 
self,' was  perfectly  applicable.  The  terrible  disaster  in 
the  Iroquois  Theater  in  Chicago  a  few  years  ago  affords 
an  interesting  illustration  of  competition  'at  its  best'! 
Two  thousand  people  were  sitting  quietly  waiting  for  a 
performance  to  begin.  Suddenly  there  was  a  cry  of 
'  Fire ! 9  They  leaped  to  their  feet  and  there  began  a  com- 
petitive scramble  for  the  exits.  There  was  'a  fair  field 
and  no  favor. y  'Every  man  for  himself.'  The  weak, — 
men,  women  and  children, — were  knocked  down  and 
trampled  under  foot.-  To  help  another  meant  to  lose 
one 's  chance  of  escape.  The  result  was  that  six  hundred 
people  lost  their  lives.  Cooperation  would  have  saved 
them  all.  Euskin  spoke  the  truth  when  he  said,  ' '  Govern- 
ment and  Cooperation  are  in  all  things  the  Laws  of  life; 
Anarchy  and  Competition  the  Laws  of  Death." 

Iea  Woods  Howerth. 

University  of  California. 


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